Proposition 22 Changed the Law, but Challenges Are Pending

John P. Kamin, Esq. Woodland Hills, California

California’s electorate voted to pass Proposition 22 in November 2020 to ensure that gig economy drivers are classified as independent contractors, not employees, but legal and legislative challenges lie ahead that could force some changes. Legal tussles over the classification of drivers for applications (apps) like Uber, Lyft, Grubhub, Postmates, and others have come up for years, and the dust may not settle anytime soon since opposition to the new ballot initiative exists at both the state and federal level. This article takes a look at these developments and provides updates on the challenges and the status of the law in California regarding who, at least currently, is considered an employee and who qualifies as an independent contractor.

Background —AB 5 and Prop. 22

In the workers’ compensation arena, the classification of drivers in a gig-economy, app-based business triggers a threshold issue: whether they are employees, covered by workers’ compensation insurance, or independent contractors, who are not entitled to workers’ compensation coverage.